Wendy Askew (Tasmania, Liberal Party) Share this | Hansard source

I rise today to speak on the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020. As chair of the Senate Community Affairs Legislation Committee, I'm pleased to make a contribution to this discussion on paid parental leave. This bill expands on the safety net already in place for working families with the Paid Parental Leave Scheme, but it makes it more flexible and therefore better. It means families are able to enjoy that special time in the first months of a child's life without having money worries. This is time our new parents deserve to enjoy with their newest family member.

It may be hard to believe, but it's 32 years since I first took what was then known as maternity leave. In fact, 32 years ago today, I was at home looking after my first child, my son, who at that time would have been about six weeks old. Those first few months with your child, adapting to a new daily structure, bonding with them, loving and caring for them and also experiencing the weight of responsibility of another human being to look after are all very special, precious moments. I acknowledge that, when I had my family, I was fortunate to work in a bank that was ahead of its time and offered staff paid maternity leave combined with the opportunity to take additional unpaid leave for up to 12 months. I also had flexibility and was able to take leave, but I returned to work on a part-time basis after about the 10-month period. Then I gave birth to my daughter, only 16 months after my son was born. But, once again, I was able to take that maternity leave and enjoy the precious time at home with both my children. Many others in the community at that time were not as fortunate. They had to use up their leave entitlements, take unpaid leave and, in many cases, simply resign when they decided they wanted to have a family. And, even if you were in the banking industry, if you were a man wanting to take paternity leave, you were offered just two weeks off.

How things have changed, and definitely for the better. On 6 February 2020 the House of Representatives introduced the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 to parliament. It was referred to the Senate Community Affairs Legislation Committee on the same day, and the committee tabled its report on 19 March, recommending that the bill be passed. The bill was introduced to the Senate on 25 February. In its report the committee noted the clear and widespread support for the measures proposed in the bill, submitters to the inquiry emphasising the positive impact the bill will have on a range of options available to working parents accessing paid parental leave and the flow-on consequences of this for women's workforce participation.

The Paid Parental Leave Amendment (Flexibility Measures) Bill builds on amendments to the Paid Parental Leave Act 2010 made by the Paid Parental Leave Amendment (Work Test) Act 2019. It also introduces additional key aspects of the Women's Economic Security Package which were previously announced in 2018-19 Mid-Year Economic and Fiscal Outlook. The Women's Economic Security Package measures have three key areas of focus: improving women's workforce participation, economic independence and earning potential. The focus of the Paid Parental Leave Amendment (Flexibility Measures) Bill is to increase women's workforce participation and provide more options to families accessing parental leave pay.

The latest statistics from the Australian Bureau of Statistics show there were more than 315,000 registered births in Australia in 2018. The median age for mothers is 31.4 years and it is 33.5 years for fathers. Considering the ABS also found that the proportion of families with children younger than five where both parents work full time rose to 21 per cent in the past decade, we can see that working families are becoming increasingly more common.

The Paid Parental Leave scheme provides eligible working parents with 18 weeks of payment at a rate based on the national minimum wage, which is currently $740.60 per week. This equates to a total of $13,330.80 over 18 weeks. This bill is all about increasing flexibility for new parents, which will help those working families bond in the early weeks. We need to be able to balance the health and wellbeing needs of new parents and babies with meaningful workforce participation. Changes to the Paid Parental Leave scheme aim to give mothers and primary caregivers the flexibility to split their maximum parental leave pay entitlement of 18 weeks over a two-year period after an initial 12-week block is taken in the first year.

When the Women's Economic Security Statement was announced in November 2018 by the then Minister for Women, the Hon. Kelly O'Dwyer, $119 million in funding was committed to improving workforce participation, economic independence and earning potential. Changes to the Paid Parental Leave scheme were included in that announcement. Schedule 1 of this bill seeks to make amendments to the Paid Parental Leave scheme so families can access their parental leave pay in a way that suits them. As it stands now, parental leave pay can only be taken as a continuous 18-week block within the first 12 month following a child's birth or adoption. However, the families of children born or adopted once the bill comes into effect will be able to split their parental leave pay into blocks of leave taken over a two-year period. This flexible plan allows for periods of work in between leave.

The changes proposed in this bill mean parents can use an initial 12-week block of their entitlement anytime within the first 12 months following the birth or adoption of their child before returning to work. This all-important time gives parents time to recuperate immediately following birth or adoption and supports health benefits for the child. It also allows time to settle into a routine and bond as a family in those first months. This initial time frame is called the paid parental leave period and the rules relating to this block are the same as those for the current 18-week period. Parents will be able to take their remaining entitlement of up to six weeks anytime before the child turns two years old, and can return to work anytime during this period. These periods combined still total 18 weeks, which is the same time currently allowed, but they allow for greater flexibility. This second type of leave is called flexible paid parental leave.

While we anticipate many families will claim their 30 flexible paid parental leave days straight after their 12-week period ends, we know others might want to use their flexible leave to support a gradual return to work. For example, a new mother might want to return to work at reduced hours after her initial 12-week paid parental leave has been used. The mother could return to work part time at three days a week and apply for the remaining two days to be paid as flexible paid parental leave for 15 weeks.

Families will be able to use their paid parental leave flexibly to support whichever approach works best for them. Of course, increased flexibility for claimants means it could work differently for employers, but the scheme will not create an additional or unnecessary regulatory burden for employers. The Paid Parental Leave scheme is fully funded by the Australian government, not by employers. This is consistent with the current scheme.

Eligibility criteria for paid parental leave and accessing flexible leave are generally the same—that is, the person must be on leave or not working, be the primary carer of the child, meet residency requirements and not be in a newly arrived resident's waiting period. However, unlike during the initial paid parental leave period, parents and others will not lose eligibility to claim parental leave pay during the flexible leave period if they don't meet the eligibility criteria on days when they're not claiming payment—that is, days when they return to work or if they stop being the primary carer for a day.

This scheme will start operating from 1 July 2020 and will be applicable to children born or adopted on or after that date. Children born or adopted before this date will be assessed under the current Paid Parental Leave scheme and receive their entitlements in a continuous 18-week block. Parents are only eligible to claim parental leave pay on days they are on leave or not at work. In many instances employees take a period of unpaid parental leave under the Fair Work Act 2009 during the period they are claiming parental leave pay. Eligible employees are entitled to take up to 12 months of unpaid parental leave associated with the birth or adoption of a child, but generally this leave is taken in a single continuous period and starts no later than the birth or adoption of the child. Under the existing framework, once an employee returns to work they usually forfeit any remaining untaken unpaid parental leave.

The changes will help thousands of new parents, many of whom are now returning to work before they have used all of their parental leave pay. Each year approximately 2,300 people access only a portion of their parental leave pay before returning to work. While this means they are losing valuable time with their child at a formative time, it also makes them ineligible to receive further parental leave pay for that child. Primary carers can return to work earlier after the child's birth or adoption without compromising their overall entitlement to parental leave pay under this bill.

We anticipate these changes will particularly support self-employed women and small business owners who cannot afford to leave their businesses for 18 consecutive weeks. For example, they can take their 12-week block of leave and then choose to take the remaining six weeks of entitlement at a time that suits their personal and business needs, such as at a quiet time for their business, like over the Christmas and new year period or during an off-peak season for specific industries.

This change reflects the range of working demands and personal preferences that women may have in relation to their return to work after giving birth or a primary carer may have caring for a child. The increased flexibility will also make it easier for mothers who are eligible for parental leave pay to transfer their entitlement to eligible partners who take on the role of primary carer where it suits the family's circumstances.

The proposed changes to parental leave pay will give parents more choice, allowing them to tailor their payments to meet their family's needs and situation. In addition, increasing the flexibility of parental leave pay could lead to a greater uptake of leave by secondary carers. This contributes to changing Australia's social norms around sharing care of children and encouraging men to take parental leave. It is anticipated that around 4,000 parents will choose to take their parental leave pay flexibly each year.

As the Liberal member for Mackellar, Jason Falinski, told the House of Representatives in February this year:

The time between a parent and their child is sacred, and this government will always fight to enhance that time… Research is now becoming more and more definitive that time parents spend with their children and children's improved developmental markers are highly correlated. As the nature of work changes, our legislation also needs to change.

On the same day, the Liberal member for Reid, Dr Fiona Martin, said: 'the value of the family unit remains central to the wellbeing of society'. Dr Martin went on to tell the House of Representatives that:

Supporting Australian families by empowering them through choice and flexibility strengthens the fabric of Australia as a whole. By making the Paid Parental Leave scheme more flexible, families have more choices. Parents can tailor their payments to their family's needs and circumstances…

This bill allows families to make the choice that best suits their financial and social needs. I commend this bill to the Senate.